samedi, août 14, 2010

Legislative Yuan considers sweeping changes to Patent Act

Legislative Yuan considers sweeping changes to Patent Act

Contributed by Lee and Li Attorneys at Law

Background


The Patent Act was last amended in 2003. From 2006 the Taiwan Intellectual Property Office (TIPO) held a number of public hearings at which it collected comments and suggestions with the aim of identifying sections of the act which might be amended in order to:


  • increase Taiwan's economic and industrial competitiveness;
  • promote the development of biotechnology, green technology, advanced agriculture and other important technology; and
  • improve the patent examination process.
It then prepared a draft amendment of the act which it submitted to the Ministry of Economic Affairs for review on August 3 2009. Following the ministry's review, the draft act was approved by the Executive Yuan on December 3 2009. The draft act was then delivered to the Legislative Yuan for review on December 11 2009.

Proposed amendments

Clarification of term 'creations'

In the draft act, so-called 'creations' belong to a high category of inventions and new utility models. To avoid the misunderstanding that the term can apply to both new utility models and designs, and to prevent inconsistent use of the term in the act, it is proposed that both inventions and new utilities be included under the term.

Change of Chinese term for 'design patent'
In line with international practice, the draft act uses the Chinese term 'sheji zhuanli patent' rather than 'xin shiyang zhuanli patent' for the term 'design patent'.

Definition of 'practice' of a patent
The term 'practice' can refer to the manufacture, offer for sale, sale, use or import of the product which uses the patent technology, and constitutes a higher level concept of use. To avoid inconsistent use of the terms 'practice' and 'use', the draft act includes a definition of the term 'practice' and amends those sections of the act which use the terms inconsistently.

Grace period
In the draft act, where a patent applicant publishes details of its application, grounds exist for seeking a grace period. The grace period would apply to the requirements regarding both novelty and inventive step.

Claims and abstract
Under the existing act, a specification must contain, among other things, the claim and an abstract. In line with international practice, the draft act requires that the claim and abstract be presented as separate documents from the specification.

Plants and animals
In order to promote the development of local biotechnology industries, Item 1, Article 24 has been deleted from the draft act. The draft act expands patent protection to include plant-related inventions and animal-related inventions.

Foreign-language specifications, claims and drawings as temporary substitutes
Under the draft act, for a patent application which is filed initially and temporarily with a foreign-language patent text, amendment of that foreign-language patent text is prohibited. Instead, provisions have been incorporated into the act in order to deal with amendments of translation errors. For example, in the draft act, except for the amendment of translation errors, an amendment must not exceed the scope of the disclosure of the originally filed specification, claims and drawings. The amendment of translation errors must not exceed the scope of disclosure of the originally filed foreign-language patent text. The draft act introduces specific regulations to regulate the categories of foreign language used for filing foreign-language patent texts and the necessary items of such texts.

Reinstatement of rights
To encourage innovation and protect research and development results, patent applications which are deemed to be filed without priority due to the applicant's failure to claim priority at the time of filing for reasons other than the applicant's intentional act, or for a granted patent which has expired because the patentee has failed to pay an annuity for reasons other than the patentee's intentional act, the draft act allows the applicant or patentee to revive the patent case. The patent right of a granted patent which has been revived will not apply to the practice of the patent by a bona fide third party, or the necessary preparation for such patent practice by a bona fide third party, during the period between the date of expiry and the date of the patent revival's publication.

Relaxation of timing requirement for patent division
In the draft act the timing requirement for making patent divisions for invention patent cases has been relaxed in order to allow a patent applicant to apply for patent division within 30 days of receiving a patent allowance decision issued at the first substantive examination stage.

Amendment of patent applications during examination stage
The draft act combines the terms 'supplement' and 'amendment' into the single term 'amendment'. The timing limitations for making amendments have been abolished. To avoid delaying patent examinations, the draft act establishes a final notification mechanism, whereby upon receiving final notification, an applicant will be able to make amendments only during the period specified in the final notification. Applications to make amendments when responding to a final notification will be accepted only if the amendment is made to delete any claim on file, to narrow the scope of the claims, to correct an erroneous disclosure or to clarify an unclear disclosure.


The TIPO will issue decisions on patent applications which fall outside these criteria.

Patent term extension for pharmaceutical-related or agrichemical-related patents
Under the existing act, one of the requirements for seeking a patent term extension for a pharmaceutical-related or agrichemical-related patent is that: "the time period during which the concerned patent cannot be practised due to application for a permit has exceeded two years from the patent grant publication date." The draft act lacks this provision. A new provision is proposed to stipulate that where a patent term extension application has not been granted before the original patent term of the concerned patent expires, but is granted afterwards, the patent right shall be deemed extended from the day following the expiration date of the original patent term. During the extended patent term, the patent right shall be limited to the active ingredients and the uses identified in the permit.

Patent right limitation and international first sale exhaustion principle
The draft act stipulates that the patent rights only apply to:

  • non-public acts made for non-commercial purposes;
  • third-party practice of a patent which has been revived pursuant to Article 72(2), or the third party's necessary preparations for practising the patent, which are made before publication of revival of the patent;
  • research, testing or other necessary activities for the purposes of obtaining pharmaceutical inspection and registration permits under the Pharmacy Act or for the purpose of obtaining permits for marketing foreign drugs.
It is also proposed that the 'first sale exhaustion' principle be made international in nature.

Definition of 'patent licensing'
In the draft act, patent licensing is categorised as either 'exclusive' or 'non-exclusive'. Subject to the licensing scope, an exclusive licensee shall be entitled to exclude the patentee or a third party from practising the licensed patent. However, where there is an agreement providing that the patentee can also practise the patent, that agreement will apply. An exclusive licensee may sub-license the patent to a third party for practise; where there is an agreement providing otherwise, such agreement will apply. A non-exclusive licensee shall not sub-license to a third party its right to practice the patent without the consent of the patentee. A sub-licensing arrangement shall have no legal standing against third parties unless it is recorded with the TIPO.

Patent cancellation (invalidation) actions
The draft act abolishes the practice of revocation actions initiated by the TIPO. The draft act contains amended provisions on the grounds for filing cancellation actions (sometimes known as 'invalidation actions') against granted patents. The draft act states that the grounds for filing a cancellation action against a granted patent shall be based on the Patent Act provisions which were in effect at the time that the patent was granted. The newly added grounds for filing cancellation actions (eg, where a patent division, patent conversion or patent amendment exceeds the scope of original disclosure of a patent, or where an amendment has substantially expanded or altered the originally granted claim of a patent) apply to patent cases granted before the date of the proposed amendments' implementation. It is also proposed that it be possible to file a cancellation action against a part of the granted claims, and that examination of a cancellation action may be based on discretional investigation. Provisions regarding combined examinations, combined decisions and withdrawal prior to a decision in cancellation cases are also included in the draft act.

Compulsory patent licensing practice
The draft act replaces the term 'specially approved practice' with 'compulsory licensing'. The grounds for seeking compulsory licensing have also been amended. For example, where the owner of a plant variety right, when practising this right, cannot avoid practising a biotech patent granted to another party, and where, compared with the biotech patent, the plant variety right contains important technical improvements with considerable economic significance, the owner of the biotech patent rights will be obliged to grant use to the owner of the plant variety rights. Under the draft act, decisions on compensation fees shall be made at the same time as those regarding the granting of compulsory licenses.

Newly added compulsory licensing ground: public health grounds
Under the draft act, new grounds for seeking compulsory patent licensing will be introduced to assist developing countries and lower-tier developed countries to acquire certain pharmaceuticals under patent protection so as to alleviate public health crises afflicting these countries.

Enforcement of patent rights
The draft act sets out subjective elements of patent infringement (ie, a patent owner may claim damages from another party that infringes on the patent with intent or out of negligence). Changes have also been made with respect to the calculation of damages (eg, a royalty rate is added as one of the methods) and methods for patent marking. The act stipulates that:


"where patent marking cannot be made on the patented product, patent marking can be made on the label of the packaging of the product, or can be made in another apparent manner which may cause others to recognise it."

New utility model patent practice
Under the draft act, where an amendment of a new utility model patent application exceeds the originally filed scope, the new utility model patent case shall be rejected. When the same person files an invention patent application and a new utility model patent application for the same creation on the same day, the patent applicant will have to make a selection prior to issuance of a decision on the invention patent application. Where the applicant selects the invention patent applications, the new utility model patent application shall be deemed non-existent from the outset; where the new utility model patent case is selected, the invention patent application will be rejected. To make the burden of proof more precise, in addition to the requirement for enforcing patent rights based on the content of the new utility model patent technical report(s), the plaintiff must exercise considerable due diligence. Under the draft act, the amendment of a new utility model patent must follow formality examination, where substantive examination and combined decision shall apply if the amendment is examined together with a cancellation action against the same new utility model patent.

Design patent practice
Design patent protection will be expanded to cover partial designs, icon designs, graphical user interface designs and designs of products which are supplied as a set. The draft act introduces the category 'derivative design patent' into the patent system to apply where the same person or entity has two or more similar designs, an original design patent case and a derivative design patent. The 'associated design patent' category has been abolished.

Transitional clauses
Considering that some of the draft act's proposed changes involve significant changes to patent practice, the draft act includes clauses regarding the transition to the new regime.

Comment

Although the Legislative Yuan has held several meetings to discuss the draft amendment, it is yet to indicate when it will make a decision regarding the draft act.


For further information on this topic please contact Daisy Wang at Lee and Li Attorneys at Law by telephone (+886 2 2715 3300), fax (+886 2 2713 3966) or email (daisywang@leeandli.com).

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